HHS Issues MLR Rule Today

With probably little to no surprise to any of us, Health and Human Services (HHS) has released the Medical Loss Ratio (MLR) rule today supporting all of the regulations the National Association of Insurance Commissioners (NAIC) recommended more than a month ago. With this ruling comes the rejection of the most recent NAIC recommendation to exclude broker/agent fees from insurance companies’ allowed administrative costs.

Under the rule beginning in 2011, individual and small group market insurance plans will be required to spend 80% of the premiums on medical care and health care improvement. Only the remaining 20% will be allocated for administrative costs.  Much the same, large group plans will have an 85% of premium requirement.

This final rule with comment period revises the regulations implementing MLR requirements for health insurance issuers under the Public Health Service Act to address the treatment of “mini-med” and expatriate policies under these regulations for years after 2011; modify the way the regulations treat ICD-10 conversion costs; change the rules on deducting community benefit expenditures; and revise the rules governing the distribution of rebates by issuers in group markets.

Click here to read the HHS fact sheet, or here to review the complete rule document.

It is yet to be seen if the recent NAIC recommendation to support brokers/agents will gain additional momentum or acceptance as we proceed with elections and “a changing of the guard”.  With the recent NAIC vote being 20 of the 26 “yes” votes from the Republican Party and 16 of the 20 “no” votes from the Democratic Party, there now appears to be signs that these issues will be supported or rejected by party lines over the actual merits of the proposed amendments. Now more than ever, we should be reaching out to our Insurance Commissioners and elected officials to share our concerns and fears for our industry and health care as a whole.  BenefitMall has and will continue to diligently work to support the broker/agent community.  We do not feel that today’s ruling will be the last chapter of this story, and we plan to proceed with the same aggressive lobbying, testifying and speaking on behalf of our broker partners and the need for their inclusion in the future of health care distribution.

Click here to see a list of Insurance Commissioners and their vote, or here to access their contact information.

Please visit www.benefitmall.com to view past Legislative Alerts. Or, you may visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources.

The views expressed in this Legislative Alert do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes.  Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.